The National Telecommunications and Information Administration (NTIA) has relaxed its letters of credit rules effective August 24 to promote participation in the Broadband Equity, Access, and Deployment (BEAD) Program. Changes will allow more small and rural broadband providers to bid for funding. While the requirement for a letter of credit remains, banks no longer need a Weiss rating but must be ‘well-capitalized’ per FDIC standards. Additionally, financial institutions rated BBB- or higher by NRSROs can issue letters, though the overall rules remain similar, minimizing project completion risks for recipients.
The National Telecommunications and Information Administration (NTIA) has relaxed its letters of credit rules for recipients of funding for federal broadband projects, effective August 24.
The changes will enable more small and rural broadband providers to participate in the BEAD program, which subsidizes costs of deploying broadband to underserved areas.
Providers will still need to submit a letter of credit from a qualifying bank, now categorized as 'well-capitalized' according to FDIC standards.
NTIA will also allow institutions rated BBB- or higher by NRSROs to issue letters of credit, facilitating broader bank participation for funding.
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